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                                                                   EXHIBIT 10.6



                               GUARANTY AGREEMENT

         THIS GUARANTY AGREEMENT, made as of March 25, 1999, by LANDAIR
CORPORATION, a Tennessee corporation having its address at 430 Airport Road,
Greeneville, Tennessee 37745 ("Guarantor"), for the benefit of FIRST TENNESSEE
BANK NATIONAL ASSOCIATION, a national banking association with offices in
Greeneville, Tennessee at 2841 E. Andrew Johnson Highway, Greeneville, Tennessee
37745 ("Lender").

                              W I T N E S S E T H:

         WHEREAS, Lender has made available to Landair Transportation
Properties, Inc., a Tennessee corporation with principal offices in Greeneville,
Tennessee ("Borrower"), a term loan in the original principal amount of
$3,000,000 which loan is evidenced by that certain Note Secured by Real Estate
from Borrower to Lender of even date herewith (the "Note");

         WHEREAS, Lender has previously made available to Guarantor an equipment
loan facility in the original principal amount not exceeding $10,000,000 and a
line of credit in the original principal amount not exceeding $15,000,000 on the
terms and conditions set forth in that certain Loan and Security Agreement
between Lender and Guarantor dated September 10, 1998 (the "Guarantor Loan
Agreement") which loans were guaranteed by the Borrower;

         WHEREAS, the Guarantor is an affiliate of Borrower; and

         WHEREAS, the Guarantor has agreed to guarantee the payment and
performance of Borrower's obligations under the Note, as provided herein.

         NOW, THEREFORE, in consideration of the foregoing and in further
consideration of the anticipated benefits to the Guarantor by virtue of its
relationship to the Borrower, to induce the Lender to make the Loan, the
Guarantor hereby covenants and agrees as follows:

         1. Guaranteed Obligations. The Guarantor hereby guarantees to the
Lender the full and prompt payment and performance of the following (hereinafter
referred to collectively as "Guaranteed Obligations"): (a) the indebtedness
evidenced by the Note, principal and any and all interest accrued or to accrue
thereon, and (b) the obligations required to be made or performed by the
Borrower under the Note and the Mortgage (as defined in the Note), and any and
all instruments, documents and/or agreements now or hereafter evidencing,
securing or otherwise related to the indebtedness evidenced by the Note.

         2. Term of Guaranty. This Guaranty shall be a continuing, absolute and
unconditional Guaranty and shall remain in full force and effect until all
Guaranteed Obligations are made or performed in full by the Borrower or the
Guarantor, as the case may be, provided that if such Guaranteed Obligations are
made or performed in full by the Borrower, the obligations of the Guarantor
hereunder shall not thereby be discharged unless a period of 91 days beginning
with the date of the last such Guaranteed Obligation made or performed by the
Borrower shall elapse


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during which no petition in bankruptcy shall be filed by or against the
Borrower, and the Guarantor shall not be entitled to return of this Guaranty
until expiration of such 91-day period. If for any reason any payment (including
principal, interest, costs, expenses and attorney's fees) by, or undertaking of,
Borrower to the Lender shall be determined at any time to be a voidable
preference or otherwise shall be set aside or required to be returned or repaid,
this Guaranty, nevertheless, shall remain in effect and shall be fully
enforceable against the Guarantor for the undertaking or payment thus set aside,
returned or repaid, as well as any obligations hereunder still outstanding,
together with any costs, expenses and attorney's fees incurred by the Lender in
connection with such determination.

         3. Guaranty of Payment. This is a guaranty of payment and not of
collection, and the Guarantor expressly waives any right to require that any
action be brought against the Borrower or any other guarantor of any of the
Guaranteed Obligations or to require that resort be had to any security. The
Guarantor further waives any right of the Guarantor to require that an action be
brought against Borrower under the provisions of Title 47, Chapter 12, Tennessee
Code Annotated, as the same may be amended from time to time. If the Borrower
shall fail to make any Guaranteed Obligation when and as the same becomes due
(whether at maturity, by acceleration or call for prepayment or otherwise), the
Guarantor, upon demand, without notice other than such demand and without the
necessity of further action by the Lender, shall promptly and fully make or
perform such Guaranteed Obligation. The Guarantor shall pay all reasonable costs
and expenses, including reasonable counsel fees and expenses, paid or incurred
by the Lender in connection with the enforcement of the obligations of the
Guarantor hereunder. All payments by the Guarantor shall be made in lawful money
of the United States of America and may be applied to the Guaranteed Obligations
as the Lender in its sole discretion deems fit. Each default in any Guaranteed
Obligation shall give rise to a separate cause of action hereunder, and separate
suits may be brought hereunder as each cause of action arises. The Guarantor
binds and obligates itself for the payment and performance of the Guaranteed
Obligations the same as if the Guaranteed Obligations had been contracted for by
and was due from the Guarantor personally, hereby agreeing to and binding itself
and its successors and assigns by all terms and conditions contained in the
Note, the Mortgage, or any other document or other evidence of indebtedness,
signed or to be signed by Borrower, and any other documents executed by the
Borrower in connection therewith or as security therefor, making itself a party
thereto, hereby waiving notice of any such indebtedness and of demand,
presentment, protest or notice of demand or nonpayment and of any act to
establish the liability of any party on any commercial or other paper,
indebtedness or obligation covered by this Guaranty.

         4. Obligations Unconditional. The obligations of the Guarantor
hereunder shall not be impaired, modified, released or limited by any occurrence
or condition whatsoever, including without limitation (a) any compromise,
settlement, release, waiver, renewal, extension, indulgence, change in or
modification of (1) any of the obligations and liabilities, either original or
assumed, of the Borrower contained in the Note, the Mortgage, or any documents
relating thereto (collectively, the "Financing Instruments"), (2) any other
security for the Borrower's obligations under the Financing Instruments, (b) any
impairment, modification, release or



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limitation of (1) the liability of the Borrower, (2) the liens and security
interests created by the Mortgage, or (3) any other security for the Borrower's
obligations under the Financing Instruments, or any remedy for the enforcement
thereof, resulting from the operation of any present or future provision of the
Federal bankruptcy laws or other statute or from the decision of any court
relating thereto, (c) the assertion or exercise by the Lender of any rights or
remedies under the Financing Instruments or this Guaranty or any other guaranty
of the Borrower's obligations under the Financing Instruments or any delay in
asserting or exercising, or failure to assert or exercise, any such rights or
remedies, and (d) the assignment or sale or the purported assignment or sale of
all or any part of the interest of the Borrower in the Premises (as defined in
the Mortgage). The liability of the Guarantor hereunder shall not be in any
manner affected, diminished or impaired by any lack of diligence, neglect or
omission on the part of the Lender to make any demand or protest, or give any
notice of dishonor or default, or to realize upon or protect any collateral or
security for the Guaranteed Obligations, or to exercise any lien upon or right
or appropriation or setoff of any monies, accounts, credits or property of
Borrower possessed by the Lender toward the liquidation of the Guaranteed
Obligations or by any application of payments or credits thereon. Any impairment
of collateral is hereby specifically waived. The Lender shall have the exclusive
right to determine how, when and what application of payments and credits, if
any, shall be made on the Guaranteed Obligations, or any part thereof, and shall
be under no obligation, at any time, to first resort to, make demand on, file a
claim against, or exhaust its remedies against Borrower, or other persons or
corporations, their properties or estates, or to resort to or exhaust its
remedies against any collateral, security, property, liens or other rights
whatsoever.

         5. Setoff. As security for the undertakings and obligations of the
Guarantor hereunder, the Guarantor expressly grants and gives to the Lender a
right of immediate setoff, without demand or notice, of the balance of every
deposit account, now or at any time hereafter existing, of the Guarantor with
any Lender, and a general lien upon, and security interest in, all money,
negotiable instruments, commercial paper, notes, bonds, stocks, credits and/or
chooses in action, or any interest therein, and any other property, rights and
interests of the Guarantor or any evidence thereof, which has or at any time
shall come into the possession, custody or control of any Lender, and, in the
event of default hereunder, such Lender may sell or cause to be sold at public
or private sale in any manner which may be lawful, all or any of such security,
for cash or credit and upon such terms as such Lender may see fit, and (except
as may be otherwise expressly provided by the Uniform Commercial Code, or other
applicable law) without demand or notice to the Guarantor, and any Lender
(unless prohibited by the Uniform Commercial Code from so doing) or any other
person may purchase such property, rights or interests so sold and thereafter
hold the same free of any claim or right of whatsoever kind, including any right
or equity of redemption, of the Guarantor, such demand, notice, right or equity
of redemption being hereby expressly waived and released.

         6. Subordination of Borrower's Indebtedness. The Guarantor hereby
subordinates all indebtedness of the Borrower owing to the Guarantor, whether
now existing or hereinafter arising, to the full and prompt payment of the
Guaranteed Obligations, when and as the same shall become



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due (whether at maturity, by acceleration, or otherwise). So long as there is no
default under the Financing Instruments, or hereunder, the Guarantor may
continue to receive and retain payment on said subordinated indebtedness when
and as the same becomes due. Any amounts received by the Guarantor as a payment
on said subordinated indebtedness subsequent to any such default shall be
retained and held in trust by such Guarantor for the benefit of the Lender.

         7. Agreements with Regard to the Guarantor Loan Agreement. Each of the
representations made by or in regard to the Guarantor set forth in the Guarantor
Loan Agreement and all documents and other instruments relating thereto
(collectively, the "Guarantor Documents") is true and correct in all material
respects as of the date hereof, as if made on the date hereof, and all covenants
and conditions to be complied with and obligations to be performed by the
Guarantor under the Guarantor Documents have been complied with and performed.
Guarantor hereby agrees to comply with the covenants set forth in the Guarantor
Loan Agreement at all times while this Agreement is in effect regardless of
whether the Guarantor Loan Agreement remains in effect during the term of this
Agreement and such covenants are hereby incorporated by reference herein.
Furthermore, the Guarantor represents and warrants that as of the date hereof,
there has been no material adverse change in the most recent financial
information given by Guarantor to the Lender.

         8. Cross-Default of Financing Instruments and Guarantor Loan Agreement.
The Guarantor hereby agrees that any default by the Borrower under the Financing
Instruments, subject to any applicable notice and cure periods, shall also
constitute an Event of Default under the Guarantor Loan Agreement and that any
Event of Default by the Guarantor under the Guarantor Loan Agreement shall
constitute a default under the Financing Instruments. The indebtedness
represented by the Guarantor Loan Agreement is paid and the Guaranty is still in
effect, all Events of Default under the Guarantor Loan Agreement shall continue
to be defaults hereunder, and if any such Event of Default occurs, a default
shall occur hereunder.

         9. Information. The Guarantor shall provide to the Lender such
information respecting the business, properties or the condition or operations,
financial or otherwise, of the Guarantor as the Lender may from time to time
reasonably request.

         10. Payment on Default. Upon the occurrence of a default under the
Note, Mortgage, this Guaranty or any other Financing Instrument, subject to any
applicable notice and cure periods, the Guarantor shall immediately pay to the
Lender, all amounts for which the Borrower is obligated to the Lender under the
Financing Instruments and the Lender may take whatever action at law or in
equity may appear necessary or desirable to collect payments then due or
thereafter to become due hereunder or to enforce observance or performance of
any covenant, condition or agreement of the Guarantor under this Guaranty.

         11. Additional Indebtedness. The granting of credit from time to time
by the Lender to Borrower, in excess of the amount to which a right of recovery
under this Guaranty is limited and without notice to the Guarantor, is hereby
expressly authorized and shall in no way affect or



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impair this Guaranty; and, in the event that the indebtedness of Borrower to the
Lender shall so exceed the amount to which this Guaranty is limited, any
payments by Borrower to the Lender and any collections or recovery by the Lender
from any sources other than this Guaranty may first be applied by the Lender to
any portion of the indebtedness which exceeds the limits of this Guaranty,
provided that any amounts collected by the Lender pursuant to the exercise of
any remedies under the Financing Instruments or any documents securing the
obligations of Borrower under the Financing Instruments shall be applied in
accordance with the applicable provisions, if any, of such documents.

         12. Assignment by the Lender. The Lender may, without any notice
whatsoever to anyone, sell, assign or transfer all or any part of the Guaranteed
Obligations, and in that event each and every immediate and successive assignee,
transferee or holder of all or any part of the Guaranteed Obligations shall have
right to enforce this Guaranty, by suit or otherwise, for the benefit of such
assignee, transferee or holder, as fully as though such assignee, transferee or
holder were herein by name given such rights, powers and benefits; but the
Lender shall have an unimpaired right, prior and superior to that of any said
assignee, transferee or holder, to enforce this Guaranty for the benefit of the
Lender, as to so much of the Guaranteed Obligations that it has not sold,
assigned or transferred.

         13. Actions of the Lender; Waiver of Rights. No act or omission of any
kind, or at any time, on the part of the Lender in respect to any matter
whatsoever shall in any way affect or impair this Guaranty. This Guaranty is in
addition to and not in substitution for or discharge of any other Guaranty held
by the Lender. The Guarantor waives any right of action it might have against
the Lender because of exercise by the Lender in any manner howsoever of any
rights granted to the Lender herein. The Guarantor further hereby expressly
waives any legal requirements incident to the making or incurring of the
Guaranteed Obligations by Borrower and specifically agrees that this Guaranty
shall be valid and binding as to the Guarantor in any event without regard to
whether or not it is enforceable against Borrower.

         14. Payments. All payments hereunder shall be made to the Lender at its
office at 2841 E. Andrew Johnson Highway, Greeneville, Tennessee 37745, or to
such other address as the Lender may advise the Guarantor.

         15. Severability. If any term of this Guaranty, or the application
thereof to any person or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Guaranty, or the application of such term
to persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term of this Guaranty
shall be valid and enforceable to the fullest extent permitted by law.

         16. Enforceability. It is the intention of the Guarantor and the Lender
that the Guarantor's Obligations hereunder shall be in, but not in excess of,
the maximum amount permitted by applicable federal bankruptcy, state insolvency,
or similar laws ("Applicable Law"). To that end, but only to the extent such
obligations would otherwise be subject to avoidance under



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Applicable Law if the Guarantor is not deemed to have received valuable
consideration, fair value or reasonably equivalent value for its obligations
hereunder, the Guarantor's obligations hereunder shall be reduced to that amount
which, after giving effect thereto, would not render the Guarantor insolvent, or
leave the Guarantor with an unreasonably small capital to conduct its business,
or cause the Guarantor to have incurred debts (or intended to have incurred
debts) beyond its ability to pay such debts as they mature, at the time such
obligations are deemed to have been incurred under Applicable Law. As used
herein, the terms "insolvent" and "unreasonably small capital" shall likewise be
determined in accordance with Applicable Law. This Section is intended solely to
preserve the rights of the Lender hereunder to the maximum extent permitted by
Applicable Law, and neither the Guarantor nor any other person shall have any
right or claim under this Section that would not otherwise be available under
Applicable Law.

         17. Notices. All notices to be given pursuant to this Guaranty shall be
sufficient if personally delivered or if mailed by U. S. Mail, postage prepaid,
certified or registered mail, return receipt requested, or forwarded by a
nationally recognized overnight courier service or telecopier facsimile
transmission, to the addresses of the parties hereto given above and/or
telecopier numbers specified in any document(s) executed by the parties hereto,
or to such other address and/or telecopier number as a party may request in
writing. Any time period provided in the giving of any notice hereunder shall
commence upon the date such notice is deposited in the mail or with such courier
service, as applicable.

         18. General Construction. The gender and number used in this Guaranty
are used as a reference term only and shall apply with the same effect whether
the parties are of the masculine or feminine gender, corporate or other form,
and the singular shall likewise include the plural.

         19. Entire Agreement. The entirety of this Guaranty is set forth herein
and in the documents referred to herein and there is no other verbal or other
agreement, understanding or custom affecting this Guaranty. This Guaranty may
not be amended, modified or changed nor shall any waiver of any provision hereof
be effective, except only by an instrument in writing and signed by the party
against whom enforcement of any waiver, amendment, change, modification or
discharge is sought.

         20. Governing Law. This Guaranty and all rights, obligations and
liabilities arising hereunder shall be interpreted and construed according to
the laws of the State of Tennessee.

         21. Successors and Assigns. This Guaranty shall be binding upon the
Guarantor, its successors and assigns, and all rights against the Guarantor
arising under this Guaranty shall be for the sole benefit of the Lender.



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         IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and the Lender has caused this Guaranty to be accepted as of the date
first above written.



                                                LANDAIR CORPORATION



                                                By: /s/ E.R. Brown
                                                Title: President


Accepted by:

FIRST TENNESSEE NATIONAL BANK NATIONAL ASSOCIATION

By: /s/ Larry Estepp
Title: Regional President






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